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On December 14, 2015, AF commented on Somebody Hates Amazon and Has Something Else to Offer :

This is an interesting question! It is all depends on geographic overage of warehouses and in time if everything will go according to the plan I am sure they will be able to cover pretty much all of the U.S. For now though, it seems that you are right and costumers in the more populated areas enjoy lower prices.

On December 14, 2015, AF commented on Somebody Hates Amazon and Has Something Else to Offer :

That is the point, Amazon is not really a retailer anymore (at least it is not how it makes its money) – it a technology company – and what Jet is trying to do is to fight the retail segment of Amazon. Convenience of course is important, but a lot of people are price conscious as well, and thats were Jet is trying to get ahead of Amazon. The broader and deeper marketplace that Amazon has didn’t materialize overnight and Jet will be able to challenge it in time (Just compare Google Maps and Apple Maps which evolved quite dramatically since the first iteration – and Apple Maps are actually is used 5 times more on iPhones than Google maps – that totally wasn’t the case even one year ago).

On December 14, 2015, AF commented on Somebody Hates Amazon and Has Something Else to Offer :

Agree. Amazon has an established ecosystem that is really hard to leave. Specifically the 2 day prime shipping is pretty convenient. In my experience though, I now look up the same products on Jet and Amazon, and in many cases some of the products on Jet are twice as cheap, so the one day delivery time difference is not a big deal when you save $40. But this is the part of personal preference and exactly on what Jet is planing to monetize – price versus speed of delivery. The limited amount of information and different SKUs for the same products are really inconvenient but I am sure that this is just growing pains of a new company.

The model of buying goods from other retailers and then selling them cheeper is of course not sustainable in the long term, but this is a start up that needs to get a market share as fast as possible, so in the meantime I believe it is a good strategy to have (Just look at Uber, Lyft etc).

Concerning the backlash of several retailers, would be great to see what will happen.

On December 14, 2015, AF commented on Intuit: Journey from Waterfall to Agile :

Sounds like an impressive change!

I would like to get more background/color around the product – I am not familiar with Quickbooks, and it made a lot more difficult to apply and understand all the great things you wrote. Just a sentence or two would be helpful (in addition to your brief mention of the company’s business). Maybe how the Company made money through Quickbooks, what are the advantages and what are the challenges. This would give a better perception of what’s at the core.

But otherwise agree with the above post on that it is awesome to see how an operational change can unleash so much value at a company!

On December 14, 2015, AF commented on Wal-Mart: Every Day Low Prices Business Model :

Interesting article.

Few things would have been helpful to mention. One of the pure operational integrations that Walmart has implemented is the way the products are located on the shelfs. There are no pretty clean shelves: stuff is just thrown there, or at least it may seem so to the first time customer. This is done on purpose – such allocation reduces cost of shelf maintenance. Also, interesting to note, customers actually love this “chaos.” Walmart once tried to move into the organic, more luxury type of produce, and it changed the store layout for that part of the products; however, customers found it very confusing, and such a strategy resulted in poor sales volumes. So Walmart shifted back to its core value proposition.

Another interesting fact is that while Walmart offers low prices for everyday products, they charge significant premiums for other items. Customers still buy, driven by their belief that all products are offered at the lowest price… buying a TV at Walmart usually is a lot more expensive than buying it at a specialized store or online.

What changed for Walmart is the environment. Market shifted as customers are now looking for other ways to shop. I would love to hear more about the competition, and how it disrupts Walmart’s business model.

On December 8, 2015, AF commented on Tesla Motors: Luxuriously Green :

Model X is the 3rd model, not 2nd. The very first model was Roadster. Model X is not a sedan, it is SUV.

Interesting about supercharges: they are build for travelers only. Tesla actually tracks cars and the rate a car uses a given supercharger, and if on the way home from work you always use conveniently located supercharger, the Company would send you an email notifying that you should not do so. In other words, these stations are there for you only if you are traveling from city X to city Y on a non-regular basis.

Quality of Tesla: not that great as one thinks. Consumer Report at first reported that Tesla stands as one of the best performing vehicles; however, the report’s “recommended” rating was pulled off immediately after 1,400 owners of Tesla Model S reported variety of issues, such as leaky sunroofs, problems with the drive train, center touchscreen console, and power equipment. That day stock fell by ~7%, roughly $2B. This was only a little more than a month ago, at the end of October.

On December 8, 2015, AF commented on Baxalta: Building Trust with Patients :

This is very vague. It is not clear what is the uniqueness of the business model. Almost any biopharma company develops, manufactures, and distributes drugs. And each will say that it strives for quality because human lives are involved.

It would be great to learn more about the company’s Global Innovation Center and the cost advantage it offers. $1.4B R&D – or 8% is a very low R&D spend for a biopharma company. Often these types of companies have R&D in the range of high teens. Is Baxalta able to achieve 8% R&D cost due to its Global Innovation Center? And if so, how? What are the terms Baxalta has with academia? How does that work?

Also, you mention 20 product launches by 2020. This seems to be highly aggressive. Usually it takes 5-10 years to approve a drug. Is Baxalta positioned to achieve this goal and why?

It is unclear how reliable sourcing of raw materials links the business model and the operating model. Are there unusual contracts? What is unusual about them? Any operating leverage?

Also, how is Baxalta able to achieve bottom line growth twice as high as sales growth? Where these cost reductions are coming from? Is it in SG&A, COGS or even R&D??? It is unclear.

On December 8, 2015, AF commented on Amazon: Taking over the (Retail) World :

This sounds very interesting.

On pricing: while lowest prices might have been or still is a business model, there are other companies that provide lower prices, for example, Jet was founded by the ex-Amazon employee, but instead of offering fastest delivery, Jet offers lower prices in exchange for extra day on average of delivery. While there are certainly folks who need products to be delivered on the 2nd day, most of the consumers would not mind waiting another day if they can save $$. Hence, in a highly competitive online retail space Amazon faces fierce competition, and it is far from true to say that Amazon’s competition is lagging far behind.

Amazon has built a great infrastructure – that is definitely their huge advantage, but most recent spike in company’s valuation was driven by their data center processing bandwidth capabilities rather than retail business. In the video, it says that Amazon pays more than an average retailer; however, for their full-time employees, Amazon pays low salaries relative to its industry. I once interviewed with them for a strategic role, but declined because of their ridiculously low compensation – that goes without saying that the position was targeting post-MBA professionals(how do you pay for your loan????).

Additionally Company has a very poor culture. Here is an article on their culture and “Rank and Yank” system:
– Not sharing best practices – promotes internal unhealthy competition
– Inward focused
– Back-biting, collusion (for example, in order to protect themselves from losing their jobs, employees may collude to hire a new person only to give him/her bad reviews and therefore to fire him/her and save own jobs)

Finally, Amazon is now shifting away from retail to a more techy side, which a positive move, I believe. The question is whether their operating and business models there match…